The Pacers just completed a 35-47 season, in which they failed to qualify for the NBA playoffs for the first time since the 1996-97 season.
Carlisle coached Indiana for four seasons, building a 181-147 record. The team's best season under Carlisle was his first when Indiana set a franchise record of 61-21 and advanced to the NBA Eastern Conference finals.
"Rick's contributions to this franchise, first as an assistant coach, then as a head coach, have been tremendous," Pacers President of Basketball Operations Larry Bird said Wednesday. "This is a mutual decision and we're happy that Rick will consider remaining with the franchise."
The team didn't announce what position Carlisle would be offered.